In the distant era before the birth of digital currency, there existed two massive 'financial kingdoms'.
The first king (central bank and old financial system): He ruled over the initial 'legal tender system'. The rules of this system were set by him alone: he controlled the minting speed and total amount of 'gold coins' (fiat currency) and allowed his vassals (commercial banks) to lend using these gold coins, playing the 'fractional reserve' game. The king and his vassals regularly 'harvested' the people within the circle (depositors and borrowers) through inflation (which diluted the value of gold coins) and credit cycles (booms and busts). When the 'value' within the circle was nearly exhausted, they turned their attention outward, using terms like 'stability', 'reliability', and 'national credit' to attract new subjects to join, using the newly influxed 'gold coins' to maintain the operation of the system.
The second king (challenger or emerging force): He keenly saw the vulnerabilities and greed of the first king's system and tried to establish his own new 'system'. He may represent early attempts at electronic currency, the concept of free banking, or more radical financial innovators. He utilized technology (such as early cryptography and prototypes of peer-to-peer networks) and slogans like 'higher returns' and 'greater freedom' to attract subjects dissatisfied with the first king. His system began to encroach on the territory of the first king.
The first confrontation: Suppression and counterattack
The first king felt threatened and deployed all his power: legislation (declaring the new system illegal), public opinion (stigmatization), technological blockade (cutting off payment channels), and even military threats, trying to strangle the second king's system.
Turning Point: Unable to eliminate, should we join instead?
However, the second king's system, based on new ideas and gradually developing technology, showed remarkable vitality, attracting more people seeking a way out under suppression, and the system grew larger and larger. The first king was shocked to find that traditional suppression methods had failed. After painful deliberation, he made a decision that seemed humiliating but was actually shrewd: 'Since we cannot prohibit it, we might as well join.' He sent his 'Chancellor' (representing the elites of traditional finance, technical experts, or regulators) with resources and influence to become the 'second-in-command' of the second king's system.
Turbulent currents: Each side's calculations
The ambition of the second-in-command (representative of old forces): He wanted to use this emerging, vibrant new system to inject the 'essence' of the old system (centralized control, inflationary mechanisms, credit expansion), with the ultimate goal of revitalizing or even merging with the increasingly decaying old system of the first king. He attempted to transform the new system into an extension tool of the old system.
The ambition of the first-in-command (representative of new forces): He saw through the intentions of the second-in-command. His goals were grander—not just to become another king, but to completely replace the foundations of all old systems. He wanted to use the rules of the new system (decentralization, fixed total supply, peer-to-peer) to prove the failure of the old system and ultimately lead everyone to abandon the first king's old system and fully embrace his new system.
The silent battle of the two kings: Old wine in a new bottle vs. Subversion of the old world
Thus, within this emerging 'financial kingdom', a silent war broke out:
The second-in-command: Tried to introduce 'central bank-style' node control, increase token issuance (simulating inflation), and establish a trust-based lending layer (replicating fractional reserves).
The first-in-command: Fully defended the core principles of the new system: Code is Law. He promoted algorithms to ensure a constant total supply (the metaphor of 21 million bitcoins), transparent and immutable transactions (blockchain), and complete decentralization of power (P2P networks, no central server). Any attempts to introduce centralized control or inflationary mechanisms were seen as a betrayal of the foundations of the 'new world'.
